By David Quasius

The ability to deliver varied and different construction delivery systems is more important now than ever before in the construction industry. Clients and projects have different needs. Part of the process of the construction professional is to identify those needs and provide a way to deliver a completed project that satisfies both the needs of the client and objectives of the project. Surprisingly, these objectives are not always the same.

A Project Delivery System is the process by which a project is designed and constructed. It defines the roles of the Owner, Architect, Contractor and/or Construction Manager and sets specific responsibilities for each party.

Traditional Bid, Negotiated General Contractor, Construction Management and Design/Build are the four basic methods of project delivery. These are all fine methods, but each of these defines the roles of the individual team members differently.

The Traditional Bid Method requires the Owner to select an Architect to develop the project fully. Upon completion of the construction documents, which includes completed plans and specifications, the project goes out for bid and generally the Contractor with the lowest price will be awarded the construction contract. Sometimes there is an invited or "short list" of qualified bidders and sometimes, as in the case for public projects, the bidding is open to all Contractors interested in bidding. An advantage of this method is that it may provide the lowest possible price. Disadvantages include, inability to chose individual construction team members, having contractors that are not compatible with each other, no early input from Contractors as to value engineering items concerning systems, materials or procedures that can affect the overall cost of the project and no verification of the construction budget before bidding takes place. It is also the longest process in that complete plans and specifications must be prepared before contractors put a price to the project.

The Negotiated General Contractor Method is typically used when the Contractor and Owner have developed a relationship, established or new, and there is mutual trust between the parties. This relationship is essential because the Owner is relying on the Contractor’s reputation and expertise and his experience with the Contractor to determine the Contractor's ability to work with the Owner and Architect as a member of the design and construction team. In this case established relationships and known quality and level of service are most important. Advantages here include choosing contractors compatible with the Owner, earlier pre-construction involvement of a construction professional during the design phase adding value-engineering considerations which can affect the overall cost of the project, verification of the construction budget before final fund raising or financing is obtained, bidding and management of the bids and retention of a check and balance system with the Architect. Contracts may be written on a Time & Material Basis, T&M Not To Exceed a Guaranteed Maximum Price or for a Lump sum: Guaranteed Maximum Price. Subcontractor contracts are normally held by the General Contractor providing single source responsibility. This method shortens the design and bidding cycle, allows for a designed project scope that will probably be within budget and may also produce the lowest price.

Construction Management is most beneficial when working on many larger, complex and long term projects where there are likely to be multiple prime Contractors and the Owner requires extra management resources to control the project. A major advantage of CM/Advisor is the relationship between the CM and the Owner. If the CM does not self perform any work, he can be viewed as a true advocate of the Owner, not having any conflict of interest concerning the actual construction. The CM typically comes on board early in the design process to aid in value engineering and budget control. Under this method, all construction contracts are written directly with the Owner. The use of a Construction Management Company can also shorten the design and bidding process. A disadvantage of Construction Management is that until a project reaches a certain size and complexity, it will generally be more expensive than Negotiated General Contractor or Design/Build. Another disadvantage is that no single source of contractual construction responsibility exists since all contracts are held by the Owner. The CM, not being the contractor, is not responsible for construction means, methods, techniques, sequences or procedures. CM/Constructor, where the CM is also the Constructor, is very similar to Negotiated General Contractor but the functions during the design phase are better defined. In this case the CM loses his benefit of no conflict of interest but the Owner gains single source responsibility for construction since the CM/Constructor holds and is responsible for all the contracts. Construction Management gained much of its popularity from public work which normally requires three construction bids by law. To circumvent that bidding requirement, Construction Managers were selected and hired as a “building professional” like the Architect through the interview process which is exactly what industry does in selecting a General Contractor through the Negotiated General Contractor Method.

The Design/Build method of project delivery allows for the Contractor to be the single source of responsibility for the Owner as Designer and Constructor. The Contractor may either have architects and engineers on staff or may choose to hire outside design services to perform the design function of the contract. Advantages include single source responsibility and early involvement of construction professionals in the design process, but it reduces the safeguards of a good check and balance system in that the Architect and Contractor are working together as one entity. Under this method the Owner chooses its Design-Build Partner. This delivery system like the Negotiated General Contractor Method has the Contractor self-performing the work to assure quality and meet the project schedules. This system may also speed up the process over the Traditional Bid Method and may also provide the lowest cost.

In utilizing any of the four methods described above and the variations thereof, an Owner must possess varying levels of expertise, involvement and trust as well as having a project that warrants a particular delivery system. The decision to choose one of these delivery systems is very personal to each Owner or organization. Each Owner ultimately decides what is most important to him or herself. The ability to choose members of the construction team, the philosophy of which system will provide the best value for the construction dollar expended, the level of trust in the individual team members, the time requirements of the project, the ability to choose a level of quality and service, the amount and manner of input from all team members during the design phase and who will help make and identify the cost decisions the earliest are all considerations an Owner has to weigh in making this decision.

A Contractor in the construction industry in the 2000's should be prepared to offer the delivery system with which an Owner is most comfortable. Each delivery system has the same goal: To provide a completed construction project that satisfies an Owner's needs and the objectives of the project. How that project is constructed will be based upon the individual requirements and comfort levels of each Owner.

It shouldn't be surprising that most Contractors will let the Owner make the delivery system decision while positioning themselves to be able to offer each of the four main types. And as if making that decision isn't hard enough for an Owner, “let the buyer beware!” There remains a large degree of variance as to how well different construction firms can professionally deliver a particular delivery system.

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